While Rep. Alexandria Ocasia-Cortez and Sen. Bernie Sanders work to lower interest rates around credit cards, results of an online survey remind us all that debt, especially from those plastic and convenient cards, can be a hard thing to dig out of.
CreditCards.com recently surveyed 1,000 American adults online, revealing that approximately 25 percent of them expect to die in debt. Meanwhile, 65 percent of them don’t know if or when they can get out of debt and 41 percent aren’t sure when they’ll pay off what they owe.
Credit card debt has recently received a fair amount of attention since Ocasio-Cortez and Sanders introduced legislation looking to cap interest rates for credit cards at 15 percent. As Ocasio-Cortez stated on Twitter, Americans should not have to pay over 15 percent in interest on credit cards, labeling this as a “debt trap” to working people.
Additional results from the CreditCards.com survey revealed that the most common debts Americans have include: personal loans (11 percent), medical debt (13 percent), student loans (21 percent), auto loans (47 percent), credit cards (53 percent), and mortgages (54 percent). Interestingly enough, as per the New York Fed, overall household debt (including all types listed above) has been increasing at a steady rate, reaching $13.67 trillion this year in Q1, which is higher than 2008’s third quarter, prior to the Great Recession. It’s important to note that along with this spike in household debt, we are also seeing an increase in serious delinquencies (marked by payments that are 90 days late or more), which are driven by student loans and credit cards.
It seems as if yes, according to Credit Cards.com, Americans are debt, but they may be in debt simply due to education, medical needs, or desperately trying to make ends meet; making it more important now than ever to live within your means and ensure you are on a monthly budget.
Scott Hastings is a CPA with over a decade experience in finance. He started his career in audit with PwC and is excited to bring that knowledge to RM Credit Cards.